US Blames Iran For Tanker Attacks, Says Tehran "Trying To Interrupt Flow Of Oil"

Update 7: Ahead of comments to the UN Security Council (which will presumably block any action, with China and Russia backing Iran), unnamed officials are sharing with reporters some of what the US intends to say:

  • U.S. OFFICIALS ALLEGE IRANIAN ATTACK MEANT TO ESCALATE CONFLICT
  • OFFICIALS: ATTACK SHOWS IRAN UNINTERESTED IN DIALOGUE WITH U.S.
  • OFFICIALS: OPTIONS UNDER CONSIDERATION INCLUDE TANKER ESCORTS

Earlier, the Saudis presented a letter to the council claiming that the Iran-backed Houthis had obtained special weapons training and were responsible for Wednesday's attack on Abha airport.

Pompeo said earlier that the US was in possession of "intelligence" suggesting Iran is behind the attack...but he neglected to offer any poof.

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Update 6: And there it is...

The Trump Administration has officially concluded that Iran is responsible for Thursday's attacks, Secretary of State Mike Pompeo said Thursday during a press briefing.

The secretary of state and longtime Iran hawk said Iran's "unprovoked" attacks are part of a campaign to escalate tension in the region and disrupt the flow of the international oil trade (if we can't sell our oil, nobody can, would appear to be the logic). He also said that Tehran rejected Prime Minister Shinzo Abe's outreach for diplomacy.

Here's an abridged version of Pompeo's statement, courtesy of CNN:

"It is the assessment by the United States government that the Islamic Republic of Iran is responsible for the attacks that occurred in the Gulf of Oman today," Pompeo told reporters at the US State Department.

"This assessment is based on intelligence, the weapons used, the level of expertise needed to execute the operation, recent similar Iranian attacks on shipping, and the fact that no proxy group operating in the area has the resources and proficiency to act with such a high degree of sophistication."

Pompeo followed up his remarks with a tweet:

The US is planning to raise concerns about Iran at the UN Security Council, Pompeo said, which is planning to meet to discuss the attacks at 4 pm ET. The US has already presented evidence to the security council that Iran was behind the last round of tanker attacks. The UN has been somewhat more measured in its approach to the attacks. UN Secretary-General Antonio Guterres denounced Thursday's incidents at a Security Council meeting, saying: "I strongly condemn any attack against civilian incidents," before adding that "facts must be established and responsibilities clarified."

He warned that the world can't afford "a major confrontation" in the Gulf, Al Jazeera.

Oil spiked on the headline...

Iran

...but stocks are sliding.

Dow

The International Association of Independent Tanker Owners (better known as Intertanko) has released a statement on Thursday's attack: The two tankers were hit "at or below the waterline, in close proximity to the engine room while underway." "These appear to be well planned and coordinated attacks," Intertanko added. Which would support the thesis that a state actor is responsible.

Earlier, CNN reported that the crew of the USS Bainbridge reported that they saw an unexploded limpet mine on the side of one of the ships attacked in the Gulf of Oman.

A limpet mine is type of a mine that is attached to a ship's hull using magnets. They were also believed to have been deployed in May during the attacks on four ships off the coast of the UAE. 

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Update 5: A spokesman for the Saudi-led coalition supporting Yemen's government in the country's civil war has come out and blamed Iran for Thursday's attack, saying they believe they can connect it to a similar tanker bombing last year in the Red Sea committed by Yemen's Iran-backed Houthi rebels. The spokesman called the attack a "major escalation", and reiterated in what sounded to us like a thinly veiled threat that Saudi Arabia has the capacity to protect its vital institutions.

You may remember that the Houthis have over the last year repeatedly fired missiles (with mixed success) at Saudi oil fields and even came close to successfully bombing a royal palace.

Earlier, over in the UK, a spokesperson for the government called the attack on civilian oil tankers "completely unacceptable" and said the UK was ready to assist in the rescue effort and investigation.

Meanwhile, senior officials from the US and UAE have attributed the attack to a "state actor," though they neglected to explicitly name Iran.

All this is happening before the investigation into the attacks has even begun. And BBG's Javier Blas pointed out that should Iran be found responsible, it would be a strange turn of events since the Front Altair is owned by John Frederiksen, the owner of the Frontline Tanker company, who moved oil for Iran during the "tanker war" with Iraq.

And with the John Bolton probably already in Trump's ear, trying to convince him that "the nuclear option" (that is, actually nuking Iran) finally needs to be put back on the table, western investors hoping to cash in on the escalation have few options to turn to (that is, other than going long oil, but even that trade appears to have its limits, as today's move would suggest).

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Update 4: Nobody has stepped forward to take responsibility for Thursday's suspected torpedoing of two oil tankers in the Persian Gulf, and Iran's Foreign Minister has argued that Iran has nothing to gain and everything to lose by provoking the Europeans and Japanese, but that hasn't stopped Washington from beating the ol' war drum.

According to CBS News, a senior American defense official told the channel's top national correspondent that "it's highly likely Iran caused these attacks." He also dismissed Iran's claim that it helped rescue the crews of both ships as "patently false," adding that the USS Bainbridge picked up 21 crew members. Iran said it dispatched a rescue team that picked up all 44 crew members from the two damaged vessels.

Members of the crew of one ship told CBS's correspondent that they believed the ship had been hit by a torpedo or a mine, but that the exact nature of the attack couldn't be confirmed.

Even more ominously: The official told CBS News that "any retaliation" from the US would depend on whether it can recover hard evidence linking the attacks to Iran, something the official expects they will find after a search of the debris.

After four tankers were attacked last month in the Strait of Hormuz - a sea-mining attack that the US and Saudi Arabia blamed on Iran - Saudi Arabia reportedly had no appetite for retaliation.  However, that has now changed.

Iran's foreign minister isn't the only one trying to communicate how little Iran has to gain from attacks like these: Bloomberg's Julian Lee argued in a column that whoever is behind these attacks is 'no friend of Iran'.

This would seem very clumsy timing from a country seeing the first tangible signs of any easing of the crippling sanctions imposed by the Americans. But it is absolutely understandable if you’re someone whose ultimate goal is to derail any easing of tensions between the two nations, and to effect regime change in Tehran.

And as we pointed out earlier, there's a much, much more sensible culprit somewhere else in the region:

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Update 3: Managers at the companies that own the tankers have weighed in on Thursday's attacks. The manager of the Kokuka Courageous described the incident as a "hostile attack," and DHT Holdings and Heidmar, the owners of the two tankers, have suspended new bookings to the Gulf.

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Update 2: It appears earlier reports that the Front Altair had sunk were, in fact, incorrect. The ship's captain has said that it is still afloat. VHF radio traffic confirmed that it is damaged but still afloat.

Hours have passed since the suspected attacks, and still nobody has claimed responsibility. Iran's Foreign Minister Javad Zarif has noted how suspicious it is that a Japanese owned vessel would be attacked while Iranian leaders were meeting with the Japanese prime minister in Tehran.

And as one BBG analyst pointed out: "Fingers will certainly be pointed at Iran as the mastermind behind these events. But the potential benefits to the Persian Gulf nation are outweighed by the risks. And even if Tehran isn't responsible, it will still suffer the consequences."

Several American warships were nearby when the attack unfolded, per radio traffic, which also showed some signs of tensions with Iranian vessels: "American warship identifying itself as 'Coalition Warship' stating they have multiple vessels and aircraft in the vicinity. Iranian Navy calling vessels asking their intention in the area."

Meanwhile, the first reported photos of the deck of the Front Altair have surfaced online...and it certainly looks like the ship was hit by a torpedo-like projectile.

Pic

Pic

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Update: The Front Altair, the Marshall Islands flag tanker damaged in Thursday's attacks, has now sunk, according to Iranian television. Later, others denied these reports.

If accurate, the sinking could have a serious impact on oil prices and the environment, as the ship contained twice the amount of oil as Exxon-Valdez.

While some sources cited torpedoes as the weapons used in the attacks, another said officials suspected the use of a magnetic mine, similar to the devices used during last month's attacks.

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And just like that...war with Iran is now almost assured.

Roughly one month after the US accused Iran of attacking Saudi- and UAE-docked oil tankers with naval mines in the Strait of Hormuz, two oil tankers were attacked in the Sea of Oman (not far from where the prior attacks occurred), leaving both ships seriously damaged, Bloomberg reports.

So far, no casualties have been reported. The attack left one of the ships "ablaze and adrift," according to the Associated Press.

Sailors from both vessels were being evacuated as the US Navy rushed to assist.

Iran

Fire

The Bahrain-based US Fifth Fleet said it received distress signals from the two ships roughly 50 minutes apart. As BBG reports, the incident will almost certainly "inflame" tensions between the US and its Arab allies on one hand, and Iran on the other.

The development will inflame already-rising political tensions in the region weeks after four vessels, including two Saudi oil tankers, were sabotaged in what the U.S. said was an Iranian attack using naval mines. Tehran denied the charge.

The Bahrain-based Fifth Fleet said it received two separate distress signals at 6:12 a.m. and about 7:00 a.m. local time. "U.S. Navy ships are in the area and are rendering assistance," Commander Josh Frey, a spokesman, said. Iran said it has rescued 44 sailors.

Though a suspected aggressor has not yet been officially named, and an investigation into the cause of the incident has only just begun, the notion that Iran will be implicated looks extremely likely, even as South Korean and Iranian ships helped rescue all 44 sailors who were aboard the two ships. Iran has already denied responsibility for the attack.

Fire

BBG

The manager of one of the tankers, the Panama-flagged, Japanese-owned Kokuka Courageous, which had been carrying a cargo of methanol from Saudi Arabia to Singapore, said the vessel had been damaged as the result of "a suspected attack" by a "shell" though the manager added that the ship's cargo was secure.

"The hull has been breached above the water line on the starboard side," Bernhard Schulte GmbH & Co KG said in a statement on its website.

Another tanker, Norwegian-owned and Marshall Islands-flagged Front Altair, sent a distress signal to the UAE port of Fujairah. It had loaded an oil shipment in Abu Dhabi not long before the incident. The ship was reportedly hit with three explosions.

Officials said it appeared the ships had been attacked with torpedoes. Another report cited officials saying three detonations had been heard.

The Front Altair was delivering a cargo of naphtha to Taiwan refiner CPC Corp, one company official said. The cargo was supplied by Abu Dhabi’s Adnoc.

Considering the involvement of the Japan-flagged vessel, the timing of the incident would be ironic. The suspected attacks unfolded as Japanese PM Shinzo Abe met with Iran’s Supreme Leader Ayatollah Ali Khamenei on Thursday, the second and final day of his visit, which was intended to de-escalate tensions in the region. There were no immediate details about what they discussed.

Oil prices are popping higher on the news, as the latest replay of one of history's most famous false-flag naval attacks, the Gulf of Tonkin incident, which helped precipitate the Vietnam war, ratchets up tensions in the region. At one point, Brent crude was up as much as 4% to over $62 a barrel.

bbg

At the very least, the US military will use the attack as an excuse to continue its escalation of personnel in one of the most sensitive waterways for the global oil trade. According to the EIA, 19% of all oil traded by sea passes through the Strait of Hormuz.

EIA

Worst case, it looks like NSA John Bolton may have just gotten the excuse he needs to justify a full-scale invasion of Iran, which we imagine will soon be confirmed as being behind the attacks.

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